Small exporters benefit from new Export-Import Bank charter approved by U.S. Senate
Smaller exporters would see improved access to export financing under legislation approved by the U.S. Senate on September 30th. The Senate agreed to re-charter the Export-Import Bank of the United States for another five years, while adding new requirements to sharpen the Bank’s focus on smaller exporters. Although the number of Ex-Im small business transactions has beeen increasing, the Bank had come under criticism in both the House and the Senate for failing to allot 20% of its financing dollars to small business, as required by law.
The Senate bill (S. 3938) would require Ex-Im to:
· Continue allocating 20 percent of its financing dollars to small business exports;
· Create a permanent new Small Business Division at the Bank, headed by a Senior Vice President who will report directly to the President of the Bank;
· Require each operating division of the Bank to have a staff dedicated to small business transactions;
· Direct the Bank to give its small business underwriters more individual sign-off authority for transactions;
· Assure that the Senior VP for Small Business has a major role in deciding any employment actions affecting these small business specialists;
· Authorize the Senior VP to review applications for Ex-Im financing by small business exporters that the Bank intends to disapprove or seeks to have withdrawn;
· Give the Small Business Division authority over outreach, including technology improvements at the Bank to aid smaller companies;
· Set up a permanent “Small Business Committee” at the Bank – headed by the Senior VP and consisting of Bank personnel from different operating units who focus on small business; and
· Require the Bank to offer delegated authority for medium term transactions (those with repayment periods of 180 days to 7 years) to commercial banks, as has been done with other Ex-Im products.
On its own, the Bank had taken several of these steps, including the creation of the Small Business Division and the naming of a Senior Vice President for Small Business. The Senate action would make these administrative changes permanent.
The U.S. House of Representatives passed similar, though not identical, legislation in July (H.R. 5068). The two Houses will iron out the differences between the bills when Congress returns in November, after the elections.